Reaching financial freedomTõnuMar 29, 2011

Big news, folks — last week Edicy reached financial self-sustainability. We no longer owe money to anyone outside the team and we are expanding our business from the growing cash flow.

Why did we have the loan in the first place

It's a common knowledge that in Europe it's harder to get a reasonable investment for your tech startup than in the US. Especially in the scary-sounding Eastern Europe, where Edicy comes from — Estonia. Unless you are willing to move to US, your options are pretty simple here. Either get a small initial investment, borrow the seed money for 3-5 years or start very small — spend only what you've already earned, bootstrap.

Edicy is a mixture of all three. Founded with tiny $ 25'000 USD seed capital back in 2007 we borrowed an additional $100'000 to get a powerful kick-start. Initially we were certain that we'll live off of it for the first 6-12 months. It makes much more sense to get a "real investment" from one or another venture capital fund when you have a real product with growing user base. And 3rd part was bootstrapping:

How did we get rid of the loan

Just to minimize the financial risks, we started designing and developing custom websites and web apps in early 2008. This kind of consultancy work created significant revenue stream that kept the overall burn rate (negative cash flow) of Edicy relatively low.

But it also blurred our focus. Instead of putting our hearts and souls fully into Edicy, we always divided our time between two different business models.

This "insurance" paid off pretty soon. In September 2008 Lehman Brothers died and the whole VC world went bananas. There was no investment for East-European gangsters like us. So after a few months into the global financial crisis we decided to pivot our whole business. We focused fully to bootstrapping and started to earn back our debts.

In a few months we could already share some of our work time with Edicy again. Still, most of the energy went to client work for the next two years.

Moving forward

We've already started to migrate half of our team of ten people back to marketing and developing Edicy. The other half continues with selected web agency work as we've grown into a well know and respected team in that.

Edicy is increasingly exiting business and product. Our users share the love — growth in the number of active and paid accounts is accelerating and we'll reach the first magical frontier of 1000 payers in the coming months.

We haven't reached the size of our biggest competitors (yet), but we've managed to be like a tiny copy of our much talked about homeland — debt free, quickly evolving and happy.